News Flash

May, 2016

Tax package proposal for 2017 in

Hungary

News Flash I Accace Hungary I Tax package proposal for 2017 in Hungary

Tax package proposal for 2017 in Hungary

On the 3rd of May, 2016, after the press conference of Andrs Tllai, the Minister of State for
Parliamentary Affairs and Taxation and the Commissioner for the National Tax and Customs
Administration, the Hungarian government submitted the current terms most important law amendment
proposal to the Hungarian Parliament. The tax proposal includes 30 law amendments in almost 260
paragraphs, but the basic conditions of the current tax system are remains unchanged. Although the
motions can be changed during the parliamentarian negotiations, but the 117 pages of the law proposal
about the excise duty and the 204 pages of the new tax package includes countless interesting items, so
it still worth to mention them in their original form in our current newsletter.

VAT reduction:

Public tax burdens:

The new VAT act proposal would like to reduce

the VAT rates of several products and services,
while the government would give up 55 billion
HUF of revenues to whiten and stimulate the
Hungarian economy.

The following products and services could be

affected:

VAT cut on poultry and eggs from the

current 27 percent to 5 percent.
The VAT on restaurant services
(including locally produced non-alcoholic
beverages) will be lowered in two
rounds; the first cut will be in next year
to 18 percent and further to 5 percent
from 2018.
The VAT on fresh milk in retail sale will
be lowered to 5 percent. The proposal
only mentioned fresh milk, so the VAT
rate of other processed milk and ultra
heat treated milk (UHT) are not going to
be changed.
The proposal intends to lower the VAT
rate of internet services by 9 percent, so
this service would be related to the
preferential 18 percent category.

With the planned personal income tax

amendment the tax benefits of families with
two children will increase, what will affect
350.000 families and increase of the current
12.500 HUF after each children to 15.000
HUF will leave them 15 billion HUF more in
total.
In case of tax debt of private individuals (up
to 200.000 HUF) the amendment would
guarantee a six month simplified allowance
free installment.
The limitation period of executions will be
lowered from the current 5 years to 4 years.

Business tax burdens:

The tax allowance maximum of small and

medium-size companies will be ceased.
With the new amendment, the current 9
HUF/kilometer of tax-exempt support of
daily commute to work will be increased to
15 HUF/kilometer.
Expectedly the conditions of R&D (research
and development) tax base reduction will
be changed favorably.
A new tax base decreasing item would be
introduced by the government about
working accommodations and mobility
housing allocations.

News Flash I Accace Hungary I Tax package proposal for 2017 in Hungary

Proposal for whitening of the

economy:

The limit of itemized VAT data submission

will be lowered from the current 1 million
HUF to 100.000 HUF.
Make the road transportation control
system (EKER) more enclosed to
eliminate the tax dodgers.
Beverage vending machine linking
obligation toward to the tax authority (NAV).
System expansion of the online cash
registers to additional businesses.

The cabinet proposes an alternative on the

excise tax on fuel: The excise tax on fuel
should be linked with the price of Brent
crude. That means if the market price of oil
drops under the threshold (currently there
are two options: 40 or 50 USD/barrel) then
the tax will come into force (raise the price
of diesel by 10 HUF/liter and raise the price
of gasoline by 5 HUF/liter) but will expire
immediately, as soon as the market rates
increases.

The result of the first taxpayer

classification:

Proposal for excise tax laws:

Much shorter and clear, reduced the

previous 150 pages to 65 pages.
Full switch to electronic system, in case of
excise duty the tax authority (NAV) can
submit the tax return.
Nearly 7000 winemakers will be absolved of
significant administration.
There will be only one type of tax
warehouse instead of the current 47.
From 2017 just like, in the case of alcoholic
beverages, tax seals will be added to
tobacco products. That means that the
current tax stamps will be ceased and no
longer used.
Because of EU standards, the by the date
of 1 September 2016 the excise tax on
tobacco products will be raised by 29
percent (in three steps) until December
2017.
From that time, excise tax will be applied to
e-cigarettes too.

The National Tax and Customs Administration

graded nearly 560.000 taxpayers by their
qualified life path and according to that:

190.000 companies got good taxpayer

classification
370.000 companies got average taxpayer
classification
and 70 taxpayers got dangerous, risky
classification.

Every taxpayer will be notified through the client

gateway and if someone disagrees with the
classification, its possible to submit objection
toward to the tax authority within six months
after the notification.
If you have any additional questions about the
planned tax package or about any bills, feel free
to contact us, our tax advisors would be pleased
to help you.

Disclaimer
Please note that our publications have been prepared for general guidance on the matter and do not represent a
customized professional advice. Furthermore, because the legislation is changing continuously, some of the
information may have been modified after the publication has been released. Accace does not take any responsibility
and is not liable for any potential risks or damages caused by taking actions based on the information provided
herein.

News Flash I Accace Hungary I Tax package proposal for 2017 in Hungary

Contact
Gbor Kertsz
Tax Manager
E-Mail: gabor.kertesz@accace.com
Tel: +36 141 235 47

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